Reconstructing Iraq funding

Collating material from a number of US government agencies and departments, the Office of the Special Inspector General for Iraq Construction (SIGIR) found that over 300 security companies from around the world have received around US$6 billion in US payments since 2003.

The funds have been used for a wide variety of protection, planning, infrastructural and training activities and services. When taken as a whole, the funds constitute by far the largest disbursement on private security operations in a modern conflict.

SIGIR head Stuart Bowen Jr admitted in an interview last week that the US$6 billion figure was likely a low estimate given that the report probably did not encompass all security contracting firms involved in Iraq.

Disturbingly, the agency's October report reveals that there is still no central oversight of US agency and departmental employment of private security companies.

This militates against hopes for the reining in of these firms in the wake of a long series of controversial incidents, including the September 2007 killing of 17 Iraqis by Blackwater USA (now Blackwater Worldwide) employees. 

Of the US$50.77 billion spent by the US on reconstruction efforts since 2003, around half has gone to training and equipping the Iraqi security services and to re-establishing the Iraqi justice system, with spending on infrastructure reconstruction projects trailing at around US$10 billion.

SIGIR inspectors found ongoing large-scale problems at a keystone infrastructure project, the Falluja Wastewater Treatment System. Project costs have tripled and the system will only cover around 40 percent of slated residences, which will likely need to connect to the system themselves if the plant ever comes into operation.

While the report stops short of apportioning blame, US ambassador to Iraq Ryan Crocker was seemingly kept in the dark over substantive project failures by embassy staff and the primary responsible body, the US Army Corp of Engineers.

A progressive trend toward indigenous Iraqi reconstruction funding looks set to ease the pressure on US taxpayers to foot the bill, at least for civil projects, as Iraqi capacities expand and SIGIR seeks to promote a positive impression of reconstruction efforts in its report brief.

Nevertheless, as of June this year, 1,262 Pentagon Iraq reconstruction projects, with total expenditures of around US$600 million, had been terminated.

With inter-agency coordination sorely absent, SIGIR also found a lack of recorded actions to suspend or debar defaulting contractors for poor performance. Indeed, some were even external page awarded additional contracts, according to the agency.

Returning to the issue of security privatization, Iraqi concerns regarding the activities of private military contractors are both well documented and founded.

It is clear that a lack of departmental and agency oversight, exacerbated by incidences of wrongful deaths in which Iraqi authorities were powerless to prosecute those held responsible, has meant the private security contractor issue has had a profound impact on popular perceptions of the Iraqi government's lack of suzerainty and potency.

Given the extent of revealed disbursements and private security firm activities, US government departments and agencies have clearly crossed the Rubicon in allowing a significant privatization of the Iraq occupation.

A wider debate is required on the merits of private security contractors' involvement in Iraq and elsewhere, both ethically and with regard to their overall role in improving security. In Iraq, the latter function is likely sharply delimited by contract stipulations and a lack of coordination with US-led and Iraqi security forces.

Largely missing in reportage on the SIGIR findings is an acknowledgment that most private security contractors in Iraq are indigenous.

The widespread use of proxy tribal and local militias in Iraq has had a far greater impact in promoting lack of consensus and the destabilization of the post-occupation state than the presence of foreign security contractors.

This process has reached new heights in the expansion of Sunni militias through the Awakening Councils. While doubtless focused on improving short-term security, with considerable success, it is important to understand the utilization of non-state proxy forces in this instance as, secondarily, a cost-cutting measure. Relying on Iraqi fighters is far cheaper than maintaining US forces in their areas of operation.

While agreeing to provide financial support to these groups, Prime Minister Nouri al-Maliki's government fundamentally rejects their existence and will likely move when it deems the time is right to unravel the Awakening group structure, with all this entails for Sunni-government relations.

With time, responsibility for both security and reconstruction will gradually devolve to the Iraqi government, whose interests do not necessarily coincide with those of the US.

As this process takes hold the widespread use of foreign security contractors in Iraq will become an increasing irritant. While providing important services in many instances, their alleged malfeasances have cast a pall on the activities of aid and reconstruction agencies and associated firms.  

In this light it is important that the US, through the upcoming Status of Forces Agreement (SOFA) and other arrangements, allow the Iraqi government to dictate the pace of the rapid indigenization of roles currently assumed by foreign private security firms. The latter will no doubt continue to take a significant security training role in coming years.

This will create new employment opportunities in a society suffering from entrenched unemployment and a prolonged economic crisis, in the process tying the futures of thousands of new workers to the maintenance of central governance and security structures.

There is, of course, a clear danger that the influence of corrupt sectarian factional interests will undermine this process. However, this is a subject for internal debate and contest.

Pleasingly, it appears that moves, through SOFA, to allow the prosecution of private security firm employees will encourage a significant attenuation of their activities in Iraq.

Looking ahead, with the expanding Afghan war likely to present similar challenges, a fundamental revision of US policy regarding reconstruction funding and oversight and the utilization of private security firms is in order.